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Envivio Reports Second Quarter Fiscal 2014 Financial Results



Envivio Reports Second Quarter Fiscal 2014 Financial Results

SOUTH SAN FRANCISCO, Calif., Sept. 4, 2013 (GLOBE NEWSWIRE) -- Envivio
(Nasdaq:ENVI), a leading provider of software-based video processing and
delivery solutions, today announced financial results for the second quarter
of fiscal 2014 ended July 31, 2013.

Financial Highlights

  * Revenue for the second quarter of fiscal 2014 was $11.5 million, compared
    to $7.5 million in the first quarter of fiscal 2014 and $10.8 million in
    the second quarter of fiscal 2013.
  * GAAP net loss for the quarter was $2.5 million, or $0.09 per share,
    compared to GAAP net loss of $4.7 million, or $0.18 per share, in the
    first quarter of fiscal 2014 and GAAP net loss of $4.3 million, or $0.16
    per share, in the second quarter of fiscal 2013.
  * Non-GAAP net loss for the quarter was $1.9 million, or $0.07 per share,
    compared to non-GAAP net loss of $4.2 million, or $0.16 per share, in the
    first quarter of fiscal 2014 and non-GAAP net loss of $3.5 million, or
    $0.13 per share, in the second quarter of fiscal 2013. A reconciliation of
    the difference between these non-GAAP financial measures with the most
    directly comparable GAAP measures, as well as a description of the items
    excluded from the non-GAAP measures, is included in the financial
    statements portion of this press release.

"In the second quarter, we began to see the fruits of our efforts to improve
sales execution, particularly in North America," said Julien Signès, President
and CEO, Envivio. "We are encouraged by our results, which were principally
driven by large orders from two tier 1 North American cable customers, one of
which was a new customer. While there remains more to do in improving our
sales execution, we are excited by the encouraging growth this quarter in our
software business, revenue growth of 55% and gross margin expansion—evidence
of the competitiveness of our products and the strengthening market demand for
multi-screen applications as well as technologies for personalized TV."

As of July 31, 2013, Envivio had cash, cash equivalents and short-term
investments of $53.0 million.

Business Highlights

  o A new tier 1 US cable customer contributed 30.2% of revenue and an
    existing tier 1 US cable customer contributed 18.9% of revenue for the
    Company in the second quarter of fiscal 2014. Additionally, an existing
    European tier 1 customer accounted for 13.4% of revenue in the second
    quarter of fiscal 2014.
  o Envivio announced video quality and compression efficiency enhancements to
    its Envivio Muse™ encoders spanning the full range of codecs, from HEVC
    (H.265) to MPEG-4 AVC (H.264) and MPEG-2. The enhancements include a joint
    solution for HEVC streaming to mobile devices and PCs with Pixtree, a
    decoding and streaming server provider based in Korea, and improved
    bandwidth efficiency for variable bit-rate (VBR) statistical rate control.
  o Qinhuandao Broadcast Network, part of the Hebei Broadcast Network Group in
    China, selected encoding software installed on Envivio 4Caster™ G4
    appliances to power Qinhuandao's multi-screen and time-shifted HD/SD TV
    service for connected TVs, set-top boxes, PCs, tablets and mobile phones.
  o VOLIA, Ukraine's number one pay TV operator, selected Envivio Muse™
    transcoders for its new over-the-top (OTT) Internet TV services. Envivio
    was selected by VOLIA to help the service provider address the
    requirements of existing customers viewing content on mobile devices, as
    well as to provide VOLIA services outside its footprint.
  o At IBC 2013, a key European industry exhibition taking place September
    13-17 in Amsterdam, Envivio will showcase a technology demonstration of 4K
    (Ultra HD) HEVC compression, live services from customers in Belgium and
    Spain, and personalized TV Anytime solutions.

Conference Call Information

Envivio will host an investor conference call and live webcast today at 5:00
p.m. EDT (2:00 p.m. PDT) to discuss its financial results for the second
quarter ended July 31, 2013. To access the conference call, dial 877-941-1427,
using conference code 4636314. Callers outside the U.S. and Canada should dial
480-629-9664, using conference code 4636314. A replay of the conference call
will be available through Wednesday, September 11, 2013. To access the replay,
please dial 800-406-7325 and enter pass code 4636314. Callers outside the U.S.
and Canada should dial 303-590-3030 and enter pass code 4636314. The live
webcast will be accessible on Envivio's investor relations website at
http://ir.envivio.com and will be archived and available on this site for at
least three months.

Non-GAAP Financial Measurements

This news release dated September 4, 2013 contains non-GAAP financial
measures. Tables are provided in this news release that reconcile the non-GAAP
financial measures to the most directly comparable financial measures prepared
in accordance with Generally Accepted Accounting Principles (GAAP). These
non-GAAP financial measures include non-GAAP gross margin, non-GAAP operating
expenses, non-GAAP operating margin, non-GAAP net loss and non-GAAP net loss
per share. 

To supplement the Company's consolidated financial statements presented on a
GAAP basis, management believes that these non-GAAP measures provide useful
information about the Company's core operating results and thus are
appropriate to enhance the overall understanding of the Company's past
financial performance and its prospects for the future.  Management is
excluding from its non-GAAP operating results Financial Accounting Standards
Board ASC 718 (FAS 123R) stock-based compensation. Management uses these
non-GAAP measures to evaluate the Company's financial results, and believes
these measures provide useful information to investors. For its internal
budgeting process, management also uses financial statements that do not
include, when applicable, share-based compensation expense. The adjustments to
the Company's GAAP results are made with the intent of providing both
management and investors a more complete understanding of the Company's
underlying operational results, trends and performance.  The presentation of
additional information is not meant to be considered in isolation or as a
substitute for or superior to financial results determined in accordance with
GAAP.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, including statements about the increasing market demand
for multi-screen applications as well as technologies for personalized
TV. Actual results may vary materially due to a number of factors including,
but not limited to, the risk that, upon completion of further closing
procedures, that the financial results for the second quarter of fiscal 2014
are different than the results set forth in this press release, unexpected
changes in Envivio's business, changes in capital spending in the markets
Envivio serves, the failure of Envivio's target markets to develop as
anticipated, disruption with existing or the failure to develop new
relationships with channel partners, unpredictable sales cycles, fluctuations
in our operating results, failure to develop new and enhanced products in a
timely manner, the loss of a key customer, the loss of our sole source
manufacturer, the loss of a key supplier, claims of technology infringement,
general economic conditions and other risks detailed from time to time in
Envivio's SEC reports. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date
hereof. Envivio undertakes no obligation to publicly release or otherwise
disclose the result of any revision to these forward-looking statements that
may be made as a result of events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.

Product information is intended to outline our general product direction, is
not a commitment, promise or legal obligation to deliver any material, code,
or functionality, and should not be relied on in making a purchasing decision.
The development, release, and timing of any features or functionality
described for our products remains at our sole discretion. Envivio reserves
the right to modify future product plans at any time. These new software
options may be purchased separately when and if available.

About Envivio

Envivio (Nasdaq:ENVI) is a leader in solutions for multi-screen video
processing and delivery. Envivio solutions remove the boundaries of
traditional television and make the world's video content universally
enjoyable by all viewers, on any device, across any network, at any time. Now
in its second decade of developing market-leading video convergence solutions,
Envivio powers services for more than 300 content and service provider
customers around the world, including eight of the top 10 mobile operators,
nine of the top 10 broadband providers and three of the top four US cable
operators. Envivio is headquartered in South San Francisco, California and has
offices worldwide including France, England, China, Singapore and Japan. Visit
www.envivio.com for more information.

ENVIVIO, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(UNAUDITED)
                                                                    
                                                        July 31,   January 31,
                                                        2013       2013
                                                        (in thousands)
Assets                                                              
Current assets:                                                     
Cash and cash equivalents                                $52,563    $51,344
Short-term investments                                   451        3,517
Accounts receivable, net of allowance for doubtful       8,616      8,376
accounts
Inventory                                                296        708
Prepaid expenses and other assets                        2,646      2,891
Deferred inventory costs, current                        1,019      318
 Total current assets                                    65,591     67,154
Property and equipment, net                              4,152      5,003
Other assets                                             243        216
Total assets                                             $69,986    $72,373
                                                                    
Liabilities, convertible preferred stock and                        
stockholders' equity
Current liabilities:                                                
Accounts payable                                        $5,809     $4,953
Accrued compensation                                     4,484      3,395
Accrued liabilities                                      1,177      1,271
Deferred revenue, current                                5,577      3,298
 Total current liabilities                               17,047     12,917
Deferred revenue, net of current portion                 1,136      1,360
Other non-current liabilities                            1,567      1,661
Deferred rent                                            876        874
Total liabilities                                        20,626     16,812
                                                                    
Stockholders' equity (deficit):                                     
Common stock                                             28         27
Additional paid-in capital                               153,283    152,168
Accumulated other comprehensive loss                     (967)      (868)
Accumulated deficit                                      (102,984)  (95,766)
Total stockholders' equity                               49,360     55,561
Total liabilities, convertible preferred stock and      $69,986    $72,373
stockholders' equity
                                                                    

 
ENVIVIO, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(UNAUDITED)
                                                                    
                   Three Months Ended                  Six Months Ended
                   (in thousands, except for per share amounts)
                   July 31,    April 30,   July 31,    July 31,    July 31,
                   2013        2013        2012        2013        2012
Revenue                                                             
 Product           $9,381      $5,669      $8,893      $15,050     $20,545
Professional
services and        2,167       1,793       1,871       3,960       3,634
support
 Total revenue      11,548      7,462       10,764      19,010      24,179
Cost of revenue                                                      
Product             3,084       2,276       3,765       5,360       8,527
Professional
services and        560         465         358         1,025       732
support
 Total cost of      3,644       2,741       4,123       6,385       9,259
revenue
Gross profit        7,904       4,721       6,641       12,625      14,920
Operating expenses                                                  
Research and        2,439       1,967       2,034       4,406       4,028
development
Sales and           4,879       5,063       5,628       9,942       11,370
marketing
General and         2,942       2,553       3,050       5,495       5,730
administrative
Total operating     10,260      9,583       10,712      19,843      21,128
expenses
Loss from           (2,356)     (4,862)     (4,071)     (7,218)     (6,208)
operations
Interest income,    13          19          24          32          15
net
Other income        21          (7)         (162)       14          (147)
(expense), net
Loss before
provision for       (2,322)     (4,850)     (4,209)     (7,172)     (6,340)
income taxes
Income tax          157         (111)       69          46          175
provision 
Net income (loss)   (2,479)     (4,739)     (4,278)     (7,218)     (6,515)
Net loss
attributable to    $(2,479)    $(4,739)    $(4,278)    $(7,218)    $(6,515)
common
stockholders
                                                                    
Net loss per share
of common stock,   $(0.09)     $(0.18)     $(0.16)     $(0.27)     $(0.32)
basic and diluted
                                                                    
Shares used in
computing net loss
per share of        27,109,942  27,061,498  26,913,125  27,086,507  20,192,392
common stock,
basic and diluted
                                                                    

 
ENVIVIO, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(UNAUDITED)
                                                                    
                   Three Months Ended                  Six Months Ended 
                   (in thousands, except for per share amounts)
                   July 31,    April 30,   July 31,    July 31,    July 31,
                   2013        2013        2012        2013        2012
                                                                    
GAAP gross margin   $ 7,904     $ 4,721     $ 6,641     $ 12,625    $ 14,920
Stock-based         $ 1         $ 1         $ 2         $ 2         $ 3
compensation
Non-GAAP gross      $ 7,905     $ 4,722     $ 6,643     $ 12,627    $ 14,923
margin
                                                                    
GAAP operating      $ 10,260    $ 9,583     $ 10,712    $ 19,843    $ 21,128
expense
Stock-based         $ (548)     $ (518)     $ (751)     $ (1,066)   $ (1,440)
compensation
Non-GAAP operating  $ 9,712     $ 9,065     $ 9,961     $ 18,777    $ 19,688
expense
                                                                    
GAAP operating      $ (2,356)   $ (4,862)   $ (4,071)   $ (7,218)   $ (6,208)
loss
Stock-based         $ 549       $ 519       $ 753       $ 1,068     $ 1,443
compensation
Non-GAAP operating  $ (1,807)   $ (4,343)   $ (3,318)   $ (6,150)   $ (4,765)
loss
                                                                    
GAAP Net loss       $ (2,479)   $ (4,739)   $ (4,278)   $ (7,218)   $ (6,515)
Stock-based         $ 549       $ 519       $ 753       $ 1,068     $ 1,443
compensation
Non-GAAP net loss   $ (1,930)   $ (4,220)   $ (3,525)   $ (6,150)   $ (5,072)
Non-GAAP net loss
attributable to     $ (1,930)   $ (4,220)   $ (3,525)   $ (6,150)   $ (5,072)
common
stockholders
                                                                    
GAAP net loss per
share of common     $ (0.09)    $ (0.18)    $ (0.16)    $ (0.27)    $ (0.32)
stock, basic and
diluted
Non-GAAP net loss
per share of        $ (0.07)    $ (0.16)    $ (0.13)    $ (0.23)    $ (0.25)
common stock,
basic and diluted
Shares used in
computing net loss
per share of        27,109,942  27,061,498  26,913,125  27,086,507  20,192,392
common stock,
basic and diluted
                                                                    

CONTACT: Envivio
         Sarah Lum
         pr@envivio.com
         +1.650.243.2710
        
         The Blueshirt Group
         Investor Relations for Envivio
         Alice Kousoum and Cynthia Hiponia
         ir@envivio.com
         +1.650.243.2702

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